FDIC returned $40Bn in U.S. Treasury funds, reversing withdrawal after SVB takeover  

 

• The Federal Deposit Insurance Corp deposited $40Bn back into the U.S. Treasury General Account on Tuesday, reversing a $40Bn withdrawal on Friday (March 10) as the regulator took control of the failed Silicon Valley Bank, Treasury financial data released on Wednesday showed.
• On Tuesday, before the restoration of the funds was disclosed in the latest Daily Treasury Statement, the Treasury said that the $40Bn withdrawal would not affect estimates of when it would be able to pay all U.S. government bills without a debt ceiling increase.
• After the initial $40Bn withdrawal on Friday as SVB Financial was closed and put under FDIC receivership, the Treasury, FDIC, and Federal Reserve on Sunday announced guarantees for both insured and uninsured deposits at the institution to shore up confidence in the banking system.
• The same protections were offered to New York's Signature Bank, which failed on Sunday, and the Federal Reserve opened a new facility to give the banks access to emergency funds.
• The restoration of the funds to Treasury's cash balance held at the Fed came a day after SVB and Signature reopened on Monday with access to the Fed facilities, which allow them to borrow from the Fed's discount window by pledging bonds at par value as collateral, rather than at their diminished market value.

(Source: Reuters)